How to address misuse of sick leave in light of the proposed increase to sick leave entitlements

18 Mar 21

The Government has introduced a Bill which proposes to increase employees’ minimum entitlement to paid sick leave from five to ten days per year. The Bill is currently before a Select Committee, and is likely to pass into law later in 2021.

Although there would be an increase in the minimum number of sick days available to an employee, the Bill does not propose to increase the maximum amount of sick leave that can be accrued by an employee, which would remain at 20 days in total.

Commentators have cautioned against the disruption that could result from the Bill passing into law, namely lost productivity at the expense of employers. There are concerns that the current sick leave framework is already easily exploited, and that the proposed law will see an increase in the misuse of sick leave.

In light of the Bill, employers should be aware of the various tools available to deter employees from using sick leave disingenuously or unreasonably.

First, employers are entitled to enquire into employee absences for medical reasons. Employers can require employees to support medical absences with proof of their sickness or injury (such as a medical certificate from a doctor). If proof of the absence is requested for a period of less than three consecutive days the cost of obtaining proof is to be met by the employer. If the absence is for three or more consecutive days, the employer is not liable to the costs of obtaining proof.

Often employers are reluctant to request medical certificates because they tend to offer little to no insight into the reason for the absence. We often see template medical certificates which say, for example, “[Name] reported to me that they are unfit for work until [date] “. This is unhelpful both in that it does not help alleviate concerns that a particular period of sick leave is not genuine, but it also does not provide an employer with any information as to whether the sickness is workplace related, or if there are factors that the employer should be aware of to ensure it can comply with its obligations under the Health and Safety at Work Act 2015. To address this issue, employees (and their medical professionals) should be requested to produce a medical certificate which complies with the Medical Council of New Zealand’s (MCNZ) Guidelines. MCNZ regulates medical practitioners in New Zealand. The Guidelines state that information disclosed within a medical certificate should be “accurate… based upon clinical observation, with patient comment clearly distinguished from clinical observation” and should “provide the necessary information required by the receiving agency“.

Requirements regarding disclosure of information could be written into an employee’s individual employment agreement, which, provided the agreement is executed correctly, would be considered specific consent. Employees could agree to ensure that medical certificates explain the injury, causal factors, when they can be expected to return to work, and any limitations on their work.

As well as providing more certainty to employers around resourcing, this level of scrutiny may deter employees from taking disingenuous or unreasonable sick leave.

However, this does not address a situation where an employee takes frequent, intermittent sick leave, and there is no reason to suspect the leave is disingenuous. This is an issue commonly faced by employers, and can be extremely disruptive, particularly where an employee fills a critical role.

Addressing this situation is complex. Where an employee has exhausted their annual sick leave entitlement and continues to take sick leave at an unsustainable level, an employer could request that the employee undergo an occupational medical assessment in an attempt to ascertain whether there are any underlying health conditions or other circumstances that may be at the root of the absences (for instance, a compromised immune system which makes the employee susceptible to illness) and to obtain a clear picture as to when the employee might be fit to fulfil the duties of their role.

Generally, these assessments should be performed at the employer’s expense.

It is an employee’s prerogative to consent, or decline to consent, to a medical assessment. However, employees who unreasonably refuse to consent to such assessments may jeopardise their ability to challenge decisions made by their employer in respect of their medical condition.

Employees also owe a duty to be open and communicative with their employers, which includes keeping their employers fully informed about their state of health and ability to work.

A refusal to consent to a medical assessment may also evidence a breach of contract if this requirement is contained in the employment agreement.

If the results of the medical assessment are inconclusive, an employer can reasonably expect an employee’s attendance to improve over a reasonable period of time. Where improvement is required, the disruption caused by the absences and future expectations should be clearly explained to the employee. Employers should take caution not to frame expectations as an absolute criteria that if not reached, will result in termination of employment or other disciplinary action.

The point at which termination becomes justifiable is dependent on the individual’s circumstances due to the overarching “test of justification” that applies in the employment jurisdiction. The test requires employers to respond to issues in a tailored, reasonable manner. Given the risk with applying this test, we strongly encourage employers to take advice before commencing any action as part of a termination process relating to medical incapacity or excessive sick leave.


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This article was included in Edition 11 of our employment newsletter – Employment News which you can read here.

For more information contact:

Jack Brown